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Spin-offs: good science can make for bad business

Doing more “killer” experiments in early stage commercial projects will save universities time and money, a conference of knowledge-transfer professionals has heard.

Designing appropriate experiments that “kill off” ideas allows the right projects to be taken forward, said Philip Oliver, business development consultant and former head of the Eli Lilly entrepreneur-in-residence programme at five UK universities.

“One of the key questions to ask is: ‘Am I prolonging the agony and wasting money by seeking success, not truth?’” he told a session at the annual conference of PraxisUnico (a UK network that drives the commercialisation of academic research), held in Nottingham on 13 and 14 June.

Great science or groundbreaking technology are not enough to make a successful commercial product, argued Russ Cummings, chief investment officer at Imperial Innovations, the AIM-listed company that grew out of Imperial College London’s technology transfer office. There are a range of challenges in taking any product to market that are often underestimated by inventors, he said.

“For example, if something comes up that requires a different voltage or manufacturing process [from its predecessor], that’s an example of the insight you need as part of a killer experiment to work out if the technology will be adopted.”

As a rule of thumb, a technology needs to be 10 times better than its predecessor in order to justify the challenge of “de-risking” it and taking it to market, he added.

Dr Cummings also stressed the importance of input from beyond universities, be it from consultants, informal contacts or entrepreneurs in residence, who institutions can trust to ask difficult questions.

Representatives from Cambridge Enterprise (the wholly owned subsidiary responsible for commercialising University of Cambridge discoveries) and Imperial Innovations said that they were generally able to pay for such consultants through core funding. But Angela Kukula, director of enterprise at the Institute of Cancer Research, said many would offer their time for free.

In smaller institutions, advice might come from external members of an oversight board or potential investors who could “look at technologies and say ‘that one’s a dead horse, stop flogging it’”, she added.

The panel also agreed that getting the opinions of respected outsiders could prove helpful in feeding bad news back to academics, especially “politically important” inventors with a high standing within a university.

Dr Kukula said that when working with academics it was important to differentiate between good science and good technology.

“Saying you’ve done the killer experiment and this is not a commercial opportunity doesn’t mean it isn’t good science,” she said, adding that academics sometimes even liked their projects “being killed” as it meant they could go straight to publication without worrying about patents.

In most instances, having the courage to kill off failing projects helped inventors by giving them “immense credibility with investors”, often leading to success in the future, added Iain Thomas, head of life sciences at Cambridge Enterprise.

He cited the university’s data storage spin-off Polight Technologies as an example. Despite great potential, a killer experiment suggested that it would fail to produce marketable products.

It ended up returning significant sums to its investors, but all involved prospered in later projects, he said: “Not only did it not waste money, it did not waste their careers.”

Dr Thomas added that if academics were inappropriately pushed down the commercial route, “you can end up looking very stupid very quickly, and this is not…something [academics] like to do”.